Most local governments do not have a comprehensive population policy nor attempt to plan for an "optimum" level of population. The few policies presently used to change demographic patterns are usually aimed at attracting industry and immigrants--except minorities. Rarely, is there an attempt to limit a community's size. The failure to consider restricting growth is caused by the feeling that growth is good and no growth means stagnation or decay and the expectation that new growth will stimulate the economy, and provide revenues beyond those required for the provision of services to new inhabitants. Unfortunately, officials have little information to measure the validity of their expectations. They do not have accurate measures of either the costs of industrialization and urbanization or the changes in expenditures which different demographic patterns require. The purpose of the proposed research is to study the effects of changes in demographic variables on governmental expenditures. If the relationships between public expenditures and demographic changes can be explained, policy makers will be better able to predict the probable consequences of (1) the location of a new industry or the loss of an old one, (2) changes caused by demographic variations, and (3) the consequences of their own policies which influence population. In the research, we will investigate county-area revenue and expenditure levels in Oregon's thirty-six counties. The research technique will be two-stage, least squares so that the structure of the interrelationships can be studied. Expenditure types and levels from three periods (1957, 1962, 1967) will be analyzed and the values derived from this analysis will be used to predict the 1972 expenditure level.